As a refundable tax credit, the ERC was made for businesses that kept paying their employees while shut down during the COVID-19 pandemic. It also relates to businesses having a huge decline in gross receipts during the eligibility periods of 2020 and the first three quarters of 2021. Though all businesses can benefit from the program, small businesses have more advantages than larger ones. Let’s find out what qualifies you for the employee retention credit.
Impacted by decreased revenue or government-backed lockdown
A vital eligibility for employee retention credit is that your business was affected by either a decreased revenue or a government-enforced lockdown. Businesses that were affected by partial or full operation suspension during the COVID-19 lockdown during any quarter can also qualify. It also includes capacity restrictions.